Determined to improve the humanitarian situation in Iraq, and convinced of the need to provide for the civilian needs of the Iraqi people until fulfillment by their Government of relevant resolutions, the Security Council this morning decided to extend the provisions of resolution 1330 (2000) until 3 July 2001.

Resolution 1330 (2000), which was adopted unanimously on 5 December,

had extended the Iraq "oil-for-food" programme for a period of 180 days from

6 December.

By the terms of resolution 1352 (2001) which was unanimously adopted, the Council expressed its intention to consider new arrangements for the sale or supply of commodities and products to Iraq, and for the facilitation of civilian trade and economic cooperation with Iraq in civilian sectors.

That intention is based on the principle that the new arrangements will significantly improve the flow of commodities and products to Iraq, other than those referred to in paragraph 24 of resolution 687 (1991). Items referred to in that text include arms and related materiel of all types, chemical and biological weapons, and ballistic missiles with a range greater than 150 kilometres. Those items are also subject to review by the Committee established by resolution 661 (1990) on the proposed sale or supply to Iraq of commodities and products on a Goods Review List to be elaborated by the Council.

According to the text, such new arrangements will improve the controls to prevent the sale or supply of items prohibited or unauthorized by the Council. They will also prevent the flow of revenues to Iraq from the export of petroleum and related products outside the escrow account established by resolution 986 (1995).

Further by the text, the Council also expressed its intention to adopt and implement such new arrangements, and provisions on various related issues under discussion, for a period of 190 days beginning 4 July 2001.

Also this morning, at the beginning of the meeting, the President of the Council, Anwarul Karim Chowdhury (Bangladesh), commemorated the passing of Faisal al-Husseini and expressed the Council’s condolences to his family. He said

Mr. Al-Husseini had been an advocate of dialogue, dedicating his life to peace in the Middle East.

The Council then observed a moment of silence.

The meeting, which began at 11:31 a.m., was adjourned at 11:36 a.m.

Resolution

The full text of the resolution, to be issued as S/2001/545, reads as follows:

"The Security Council,

"Recalling its previous relevant resolutions, including its resolutions 986 (1995) of 14 April 1995, 1284 (1999) of 17 December 1999 and 1330 (2000) of 5 December 2000,

"Convinced of the need, as a temporary measure, to provide for the civilian needs of the Iraqi people until the fulfilment by the Government of Iraq of the relevant resolutions, including notably resolutions 687 (1991) of 3 April 1991 and 1284 (1999), allows the Council to take further action with regard to the prohibitions referred to in resolution 661 (1990) of 6 August 1990, in accordance with the provisions of those resolutions,

"Recalling the Memorandum of Understanding between the United Nations and the Government of Iraq of 20 May 1996 (S/1996/356),

"Determined to improve the humanitarian situation in Iraq,

"Reaffirming the commitment of all Member States to the sovereignty and territorial integrity of Iraq,

"Acting under Chapter VII of the Charter of the United Nations,

"1. Decides to extend the provisions of resolution 1330 (2000) until 3 July 2001;

"2. Expresses its intention to consider new arrangements for the sale or supply of commodities and products to Iraq and for the facilitation of civilian trade and economic cooperation with Iraq in civilian sectors, based on the following principles:

"(a) that such new arrangements will improve significantly the flow of commodities and products to Iraq, other than commodities and products referred to in paragraph 24 of resolution 687 (1991), and subject to review by the Committee established by resolution 661 (1990) of the proposed sale or supply to Iraq of commodities and products on a Goods Review List to be elaborated by the Council;

"(b) that such new arrangements will improve the controls to prevent the sale or supply of items prohibited or unauthorized by the Council, in the categories referred to in paragraph 2 (a) above, and to prevent the flow of revenues to Iraq outside the escrow account established pursuant to paragraph 7 of resolution 986 (1995) from the export of petroleum and petroleum products from Iraq, and also expresses its intention to adopt and implement such new arrangements, and provisions on various related issues under discussion in the Council, for a period of 190 days beginning at 00.01 hours on 4 July 2001;

"3. Decides to remain seized of the matter."

Background

When the Council met, it had before it the Secretary-General’s latest report on the “oil-for-food” programme, the humanitarian programme in Iraq established pursuant to Council resolution 986 (1995) (document S/2001/505). The report covers a 180-day period –- Phase IX -– which began on 6 December 2000, and provides information on the distribution of humanitarian supplies throughout Iraq.

The report states that since the beginning of Phase IX, and as at 30 April 2001, the oil overseers and the Security Council Committee established by resolution 661 (1990) concerning the situation between Iraq and Kuwait have reviewed and approved a total of 159 contracts (including 59 contracts from

The total quantity of oil approved for export under those contracts amounts to approximately 490 million barrels, with an estimated value of €12.1 billion, or $10.7 billion. However, the volume of oil contracted far exceeds the anticipated export volume of 290 million barrels under Phase IX.

The estimated total revenue forecast for Phase IX (before the deduction for pipeline fees) is €6.5 billion, or $5.7 billion, at current prices and rate of exchange, the report continues. This is approximately €4.4 billion, or $4 billion, less than that of Phase VIII. This is attributable in part to the decline in market prices over the period, but predominantly to the reduced rate of oil exports under the programme during the first part of Phase IX, accounting for approximately €2.8 billion, or $2.6 billion, of the revenue that was not made available.

Noting his previously expressed concern on the subject, the Secretary-General confirms with regret that, despite the increase in the daily average rate of oil exports under the programme to at least the levels of the previous phase during the last two months, it is now estimated that the total revenue of oil exports under the programme during the current phase (which will end on 3 June 2001) will reach only €6.5 billion, or about $5.7 billion. That will provide only about $3.5 billion for the implementation of the programme, after the deductions pursuant to the relevant resolutions of the Security Council.

The Secretary-General writes that the authorization for Iraq to export unlimited amounts of oil and to import a wider range of goods has transformed the programme’s nature and range of activities from providing emergency humanitarian relief to encompassing many aspects of rehabilitation of essential civilian infrastructure. In that light, he appeals to the Council to streamline their current cumbersome approval procedures and allow greater latitude so that a wider variety of medicine, health supplies, foodstuffs, as well as materials and supplies for essential civilian needs, can be procured and supplied most expeditiously. Such an approach would also reduce the excessive number of holds placed on applications.

Notwithstanding the range of opinions and discussions on a broader framework for the programme, the Secretary-General appeals to all parties concerned to preserve the distinct humanitarian identity of the programme. He is encouraged by the work and achievements of the United Nations observation mechanism to date, and is confident that the mechanism can provide the necessary assurances to the

Security Council and its Committee that supplies and materials provided under the programme are indeed being utilized for approved purposes.

The report goes on to say that with the increased funding level and the growing magnitude and scope of the programme, the whole tedious and time-consuming process of the preparation and approval of the distribution plan and its annexes are no longer in step with current realities. It may be recalled, he writes, that the distribution plan for the present phase was submitted by Iraq almost two months into the current phase. It should be borne in mind that soon after the approval of a distribution plan, thousands of amendments are submitted throughout the course of a given phase and thereafter. Accordingly, the Secretary-General notes, he has directed the Executive Director of the Iraq Programme to continue discussions with Iraq with a view to devising a more appropriate and flexible planning process.

It is essential for the Government of Iraq to prioritize its contracting, giving particular attention to the food, health and nutrition sectors, the Secretary-General writes. It is also essential to address urgently the problems arising from inordinate delays in submissions of applications and from the submission of non-compliant applications. It is unfortunate, he writes, that while the Secretariat has notified Iraq of its concern over delays in the submission of contracts, feedback from the Government showed that, in many cases, contracts have been signed, but suppliers have yet to submit them. He appeals to Iraq to insist that its suppliers submit applications in a timely fashion.

In conclusion, the Secretary-General stresses that it is incumbent on all parties concerned to take concerted measures to ensure the effective implementation of the humanitarian programme in order to alleviate the plight of the Iraqi people, and to refrain from any actions that could exacerbate the already fragile living conditions of the average Iraqi.

* *** *

For information media. Not an official record.

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Daily Noon Briefing

The Secretary-General condemned today’s murder of a Palestinian child in the West Bank and called for the perpetrators of that terrorist act to be promptly brought to justice. He expressed his deepest condolences to the family of Ali Dawabsha, who were themselves severely injured in the arson attack. He urged both sides to take bold steps to return to the path of peace.